Post # 1
(If you are like me and tend to scan through to find the really relevant stuff, I have bolded it. Otherwise, read on through!)
We have been house hunting for a little while and ran across this place. It is a foreclosure and the price is too awesome (atleast we think until we get there and see it in person.) WE are doing a walkthrough on tomorrow (Saturday) and neither of us can wait. We budgeted about $100 K for a house and were hoping to come in much less. Well, if we get this house, we will. AND we will be getting a $200,000 home for it! This place comes in at $77,300 It definately needs some work done. But it is all superficial from the looks of it and certainly projects we can manage. (Most of which come from the kitchen from the looks of it.)
It is HUGE compared to our small 750 sq ft apt we are living in now (Over tripple with 2,360 sq ft) and has 4 bedrooms. One will be an office. One will be a nursery eventually… and the other will be the same in a few years but, until then, a guest room for all those guests we don’t have over? Will the dogs end up with their own room? (weird) And it has an eat in kitchen and a formal dining room. Uhm… we only have 1 table and it is not “formal dining room” size. I am sure we will grow into it and believe me, I am not complaining about the major gain in space if we end up pruchasing this place. I just know it will feel overwhelming at first. But that is something I can certainly manage for the same price I can get a house that is too tiny.
What excites me most about this place is the size of the kitchen, the space, the niceness of it, the PRICE!We are budgetting about 5 K to get the missing appliances and fix up some basic things. Other things will come over time. (Like painting those 70’s wooden walls and replacing that horribly stained up carpet.) I know it will all be different once we actually get into the place but, I want your guys’ oppinions on it for now.
Since this is our first home, we are clueless to begin with. But, has anybody else ever bought a foreclosure? How is it any different than buying any other house with the exception that it is As Is? We will be talking to our realtor about it on Sat but I wanted outside points of view on this as well.
Since foreclosures are obviously a sensitive subject for those who have gone into it and simply for the basic risk that this could be anybody’s house, even somebody on here, I will only give the link of pictures and info in PM.
Post # 3
It sounds like a great deal as long as everything looks good when you get there. We didn’t buy a foreclosure (we’re under contract on a short sale right now) but we put in an offer on one. One thing I will say is that the price seems amazing but if it’s that great of a deal, you may have to go in over asking. We went in almost $10,000 over asking which seemed like a lot to us and didn’t get the house. I would be happy to look at the link in a PM too if you would like and I could also send you the link to the house we lost after going over if it’ll help.
Post # 4
Foreclosures can be a treasure or a money pit..
You just have to find out as much as possible on the potential home, and have a good inspector. Sometimes foreclosures could be because the owners hit hard times, family disputes leading to the bank taking over it, failed to paid taxes and city takes over and sales to a bank just all kinds of things.
I hope you love it in person! Take pictures and share hehehe
Post # 5
We bought a foreclosure that turned into a nightmare for us financially. It was also an ‘as is’ sale.
The problems turned out to be too many to list, but we bought it for a great price with the intention of fixing it up, living in it for at least 5 years, and moving on to something newer. What we didn’t know was that since it was a government owned foreclosure, it was ineligible for refinancing as well as insurance, until all the problems were rectified and inspected. We wanted to borrow more than it was worth TO fix it, but it didn’t turn out that way, due to our trying to save money and going forward without the advice of an attorney (trying to save some money).
It was a legal mess that cost us many thousands in attorney fees as well as the money we paid for closing costs and deposits for utilities. We essentially gave it back….and walked away.
If this is your first time around with homebuying, you need to be educated about the entire process, and not go in with blinders on,expecting the realtor will guide you through it. Their job is to sell homes (they work for the sellers), and they are not looking out for your best interests, unless they are a buyer’s broker.
If YOU can see some obvious defects, what else might be hiding underneath?
Post # 6
@Eva Peron: No. But according to our realtor it just went on the market 10 days ago so if we want it, we need to move reletively fast due to the price.
Post # 7
@ItWasntMe: We are definatley going to have the home inspected by a 3rd party and are wanting some non-realtor advice for that reason. Although, I gotta say, so far our realtor has been blatantly honest about issues in some houses. He doesn’t try to sugar coat problems because, in the end, they are problems and we should be aware of it. But, I do see what you are saying. I am trying to do my research as much as possible.
Post # 8
- Wedding: October 2011 - Bed & Breakfast
Friends got a great deal on a foreclosure and things went really smoothly for them. They got a great house in an adorable neighborhood for a steal! Unfortunately, we have not had the same luck. The foreclosures we have seen looked amazing in photos. But once we got there are started looking hard, the years of neglect became clear. Most foreclosures that we have seen need new roofs pretty much immediately, many have mold issues because of said poor roofs, they have poorly/improperly done DIY wiring and/or plumbing, and generally pose a huge risk to the buyer. I think part of the situation is that our area is quite expensive, so homeowners who are on the brink have chosen to delay necessary maintenance and repairs and/or DIY them with cruddy results just to get by. So it will really just depend on the house and your area.
Things we’ve found out through experience that may be helpful:
1. If the house is winterized, you may have to pay to get the water and electricity turned on for the home inspection. This will add to your inspection costs. Depending on the bank, you may be able to negotiate it that they pay for turning everything on.
2. Because the house is winterized and nothing is going through the pipes, you may be in for a rude surprise when the water is turned back on. Pipes corrode, sometimes stuff gets in there that shouldn’t be, etc.
3. Forclosed homes typically feel eerie. There’s no sense of life in them, so you sometimes have to work harder to imagine yourself living in them. (or maybe that’s just me being weird)
4. Banks are just doing business. You need to think of the transaction the same way. Do not let yourself get attached. (Yeah, personal experience on that one. I felt so crushed. It was the first house I fell in love with, and saying “goodbye” to it left me in tears. Oh the dramaz.)
5. If this one doesn’t work out, there will be something else just over the horizon. There is ALWAYS another house.
Post # 9
I am amazed at how cheap american houses are!! Here the prices start at £120,000 ($188,000) for like a two bedroom cupboard sized house. We also require a minimum of a 20% deposit. Maybe i should consider a move to the US ha!
PS, good luck OP! It sounds like an amazing deal..
Post # 10
I would have him check and see if it was on the market prior to this. Most foreclosures around here they take on and off the market several times. And black mold is usually present. Have you been inside yet? Pictures can hide a heck of a lot. I always look at info on zillow to get background info on a house.
EDIT: To clarify. You have not been in, but has the realtor?
Post # 11
We bought a foreclosure and got a great deal. Like any house (other than new builds) it came with its own “personality” <– aka issues we didn’t find until we had it. Nothing major, just some unexpected stuff that everyone tells you to expect! The actual closing process (and bidding, going back and forth) process was a PITA but I get the impression that is normal.
Post # 12
@StormyRose: No. We found it and showed it to him. He had never seen the house before. We are looking this Saturday.
Post # 13
@Mrs Hedgehog: Make sure you get the property professionally evaluated so you know the condition of the roof, foundation, plumbing, pest and all that type stuff. Also, look on the tax assessor to see what it sold for over the years and the current appraised value. Also, look to see the values of at least 5 homes and their sales prices on the street. Don’t get too attached, it real estate. It may or may not work financially. As much as you can try to make a sound business decision. Too many emotions will sometimes cause you to pay too much money.
Post # 14
Never buy a house without a home inspection. It could cost in upwards of $500 for a good one, but well worth it in the long run. Even if the bank won’t work with you or do any repairs at least you know what to look forward to. And as far as your $5000 budget, be careful. We bought a house in August, and even though it’s in great condition we spent about $8000 making it perfect for us.
My other piece of advice, paint first! It makes such a HUGE difference and it’s relatively cheap.
Post # 15
We bought a foreclosure last summer and got a FANTASTIC deal on it. We had been under contract on another house right before we found our house, but that fell through when the seller refused to lower their price after a low appraisal (dumb!). The day after we ended our contract, the foreclosure had a price reduction so I sent the listing to my realtor and she said it looked like an amazing deal. We went and looked at it that night and surprisingly for a foreclosure, the previous owners seemed to have taken really good care of it (like all of the manuals for appliances were still in plastic sleeves in a drawer in the kitchen). We put an offer in that night (along with 3 other people). We were so lucky we got it and it’s definitely true that the right house will work out as it should.
I agree with PPs who said the whole process was a PITA. It was. The previous contract we’d had, everything was very structured, there was a lot of communication between the sellers’ agent and ours, but dealing with Fannie Mae was a whole different story. Our timeline for inspection, etc. started before we even received a sign contract from the bank, which is NOT how it usually works. They pretty much got things signed and back to us when they felt like it and ignored the MLS standards. Our realtor was very frustrated with them by the time we closed, but in the end it was worth it!
Post # 16
I think it will depend on the home inspection. Not all foreclosures are nightmares. My husband and I just bought one in November and it was a quick process. We put in an offer, heard back from the bank within a couple of days and after we agreed upon a price, closed in 34 days. Our house was built in 2006 so there are essentially no problems with it structurally. The previous owners ripped out light fixtures and bath hardware, which we had to replace but other than that, we have been absolutely thrilled with our new home. Obviously since foreclosures are sold “as is,” we didn’t ask for any of the fixtures to be replaced but other than that, there is not much difference when buying a foreclosure. In my experience, short sales are the ones that are much more difficult. Good luck!